The participation of insurers from rural areas is abysmally low in our country. And life insurers, especially private companies, have always been focussed more towards the urban population. For a long time now, the sector has not found many takers from rural areas due to several reasons such as low literacy rates, low incomes, etc. 

According to IRDAI, the insurance tech is a business that is yet to penetrate more than five percent of India’s population in the life segment, and in the non-life segment it is only 15 percent of the total viable market of $100 billion.

Spotting a gap in the segment, Abhishek Tiwari founded iAssure in 2015. The Jaipur-based startup aims to increase insurance penetration in semi-urban and rural areas, and is providing a platform for people to buy all general insurance products with point of sales persons (POSPs). 

“While working in Tier-II and III markets, we realised there was a huge gap in distribution as far as insurance is concerned. For example, Rajasthan has 33 districts and 300 plus tehsils. The presence of private insurers is not more than ten districts, whereas public players have their presence in all 33 districts and another 30 tehsils. It implies that rest of the market is served by individual or corporate agents who have their own limitations when it comes to offer choice of product and servicing,” says Abhishek. 

“We decided to solve this problem of distribution by digitising the insurance services, create mass level networks, create employment, and serve the unserved and underserved consumers in semi urban and rural markets of Bharat,” he adds. 

According to the company, it is helping individuals sign up with the right insurance plans at affordable price. At present, the startup is providing services in the northern regions of the country, and is currently present in ten states.

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The journey

A law and CA graduate, Abhishek worked with the ICICI Bank for a decade. He also served as the CEO at Au Insurance broking, and it was here the idea of iAssure was born. 

Abhishek says his mission statement is simple – he wants iAssure to insure 5,600 tehsils of India and become a one-stop solution for all financial protection needs of the customers in the next five years. 

“iAssure aims to solve the problem of lack of awareness, trust, digitisation, and distribution in semi urban and rural markets, which is home to eighty percent of the Indian population. iAssure also aims to bridge the deficit of trust by getting the transaction executed through a hyper local trusted resource who talks to the customer in his own language. It’s a sociable, sustainable, and scalable business model,” says Abhishek. 

“When I started out, there were difficulties. Like any startup, there was lack of trust initially among customers. Building a team, creating a model, and establishing a PoC with the technology platform was difficult. Three years down the line, we realised it’s a natural path, which any business or entrepreneur has to travel,” says Abhishek.

iasureThe product

The startup appoints point of sales people (POSP) who travel to towns and use digital means to show different products and pricing to customers that suits their needs. They assist individuals in choosing the right product and also help people with digital payments. 

“We recruit people with basic qualifications from remote areas, provide training to these individuals, and enable them to sell insurance in semi urban and rural markets. These people enjoy the trust of local customers as they belong to the same place, thus helping in the creation of employment/self-employment in these markets as well,” says Abhishek. 

IAssure’s point of sales person can use the phone to access products from multiple insurers, and compare and advise people about the best insurance plan to suit their needs. Since all this happens on a digital platform, it is easy for them to explain the product to the customers. They can also cross sell/upsell to same customer along with a motor insurance and the POSPs can also pitch a health insurance.

The company claims to be having 5,500 POSP counters in the last three years and has issued close to half a million policies.

The insurance market in India

In FY-16, the Insurance Regulatory and Development Authority of India (IRDAI) introduced and came up with guidelines for Point of Sale Persons, which was aimed at increasing penetration of insurance products by spreading distribution. Under these guidelines, intermediaries were allowed to appoint point of sales people under them who could sell pre underwritten products.

iAssure

Iassure founder Abhishek

Speaking about the current scenario, Abhishek says: “In the life insurance space, about 65 percent market is dominated by individual agents, 25 percent by corporate agents, five percent by insurance companies directly, and the rest is distributed among others. Only five percent sell online. So 95 percent of the market in life insurance is B2B and only five percent is B2C.”

According to the startup, in the non-life insurance segment ,about 30 percent is contributed by individual agents, 12 percent by corporate agents, 28 percent is direct, and 22 percent by brokers. Therefore 80 percent market is B2B and 20 percent B2C.

With the advent of technology and the release of POSP guidelines by IRDAI, the model is now evolving to assisted sales, where there will be physical touch points (individual advisors) with digital enablement. That’s where iAssure’s sweet spot is. 

The business and plans ahead

The bootstrapped startup, which is funded by family and friends, has made a total investment of close to Rs 12 crore in the company till date. 

The startup follows a revenue sharing model. iAssure shares 75 percent of the revenue with the POSP who sources the business and retains a margin of 25 percent on each transaction. 

Till date, the startup, which competes insurtech startups like Acko, Policy Bazaar, and Artivatic, claims to have served half a million customers. The startup clocked a revenue of Rs 9 crore in FY-20, and is eyeing Rs 15 crore in revenue by FY-21. However, the company is yet to become profitable. 

“Q-1 has been encouraging so far owing to the all-time high risk recognition among customers due to the COVID-19 outbreak. There has been a positive shift in the product mix and we have booked more business in health and life insurance vertical as compared to motor insurance,” says Abhishek. 

In the next 18 months, the startup wants to cover 1,400 tehsils in 10 states in its current area of operation and penetrate vertically. So far, it has covered 500 tehsils in North India. 

The government and IRDAI are also relentlessly working on reforms to improve the situation. Recently, the government increased FDI to 100 percent in the insurance intermediation business, and this alone means that iAssure can scale up in the future. 

Edited by Megha Reddy

Original Source: yourstory.com

Jaipur-based last mile rural distribution startup, Frontier Markets, on Monday announced that it has raised $2.25 million in a Pre-Series A funding round led by ENGIE Rassembleurs d’Energies, The Rise Fund, and The Singh Family Trusts (advised by Artha Impact), along with Teja Ventures and affiliates of Beyond Capital Fund.

 

Founded in 2011 by Ajaita Shah, Frontier Markets is a last mile-assisted ecommerce and distribution company that leverages its network of tech-enabled women agents to market, sell and service products and services across rural India. 

 

The current investment will drive the company’s assisted ecommerce platform to the next level, adding digital marketing tools, AI-enabled digital training, and a B2C solution onboarding its rural customers directly on its digital platform, it said. The company will also leverage its B2B2C ecommerce to drive digital and physical services to rural customers and become the primary income source for rural women.

Ajaita Shah, Founder and CEO of Frontier Markets

Ajaita Shah, Founder and CEO of Frontier Markets

Also ReadFrontier Markets: A Lesson in Rural Product Positioning and Marketing

 

Frontier Markets claims to have over 4,000 women entrepreneurs who are tech-enabled using its proprietary assisted ecommerce platform to deliver over one million products and services to 700,000 rural customers in Rajasthan, UP, and Bihar. The company said it is associated with several partners including Samsung, Crompton, HUL, Eko India Financial Services, and more to curate products based on data insights collected through its tech platform.

 

In response to COVID-19, Frontier Markets launched doorstep delivery of essential goods and digital banking services as a response to the challenges presented by limited access to supplies in rural India. 

 

Ajaita Shah, Founder and CEO of Frontier Markets said, 

 

“Prior to COVID-19, Frontier Markets invested in a technology platform that leveraged data to deliver a wider range of products and services in energy, finance, connectivity, agriculture and more to the last mile consumer, digitally onboarding all of our agent network. Today, we have added essential products and services—from food to protective gear to mobile banking, recognizing that our customers trust us and want us to deliver all solutions to them through our platform.”

  

Lead Investor Anne Chassagnette, Managing Director of ENGIE Rassembleurs d’Energies’s commented, “

 

“The swift adjustment of Frontier Markets’ organization to the COVID-19 crisis and its ability to leverage its innovative tech platform to address the essential needs of the rural population on short notice confirm our full support and our trust in its trailblazing business model.”

By 2025, the company plans to grow to one million rural women entrepreneurs serving 100 million consumers with all types of products and services relating to agriculture, insurance and environment to drive economic empowerment in Bharat India.

 

“Post-COVID, what was “socially good” has now become essential and urgent – Frontier Markets is leveraging upon the untapped opportunity of 900 million rural consumers through rapid expansion of its technology platform and its network of digitally enabled women micro entrepreneurs,” remarked Virginia Tan, Founding Partner, Teja Ventures.

(Edited by Aparajita Saxena)

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Original Source: yourstory.com

Life has improved dramatically for millions of people living in rural areas of the People’s Republic of China. Photo: ADB
Language
English

The People’s Republic of China set 2020 as the year it aims to eradicate absolute poverty nationwide. Rapid economic growth has lifted more than 850 million people out of absolute poverty since the beginning of economic reforms in the late 1970s, contributing to about 70% of worldwide poverty reduction. It has not yet announced final poverty figures for the year, but the official poverty rate had fallen to 1.7% of the rural population by 2018. The country’s achievement in poverty eradication must count as one of the most remarkable achievements in modern history.

The country has placed agriculture, farmers, and rural areas (three nong) at the core of its policy agenda to achieve the goal of a moderately prosperous society (xiao kang). Comprehensive rural development policy has supported remarkable growth in agricultural productivity and boosted off-farm income, which now accounts for more than 70% of rural household income.

Four features of rural development in the People’s Republic of China provide particularly important lessons for developing countries in Asia.

Flexible policies: The government adjusted rural development policy strategies to fit rapidly evolving socio-economic situations. For example, the No.1 Central Document has been annually updating the policy priority for rural development for each of the last 14 years. The initial policy reform in the late 1970s focused on boosting food production and maintaining grain self-sufficiency. The policy evolved in the mid-1990s to increase competitiveness of the rural economy through agricultural modernization and diversification of economic activities. Since the 2010’s, rural policy has shifted to a more integrated and balanced approach to improve economic, social and environmental welfare in rural areas. Support to agriculture was also gradually refocused from maintaining grain self-sufficiency to ensuring long-term food security through sustainable use of natural resources.

Innovative institutions. Innovations were introduced in rural land use and the reorganization of small-scale farms. A Household Responsibility System that originated in the late 1970s allocated land contract rights to individual households. This initial reform boosted agriculture production in the early 1980s, but created a small and fragmented farm structure. Since the 2000s, a variety of institutional innovations consolidated small scale operations into larger units. The holders of land contract rights were allowed to lease out their land operational rights.

The emergence of farm mechanization service providers enabled small-scale farmers to quickly mechanize their cultivation activities without heavy capital investment. Mechanization reduced labor input for farming and increased time available for engaging in off-farm income opportunities. Voluntary cooperative organizations provided a range of services to connect small-scale farmers to markets and the latest technologies through training, and collective marketing and inputs supply. Some co-operative organizations consolidated land operational rights from the member farmers to form a single farm management unit. All these institutional innovations are highly relevant for other countries with a small and fragmented farm structure.

  Four takeaways from the stunning decrease in poverty in the People’s Republic of China.

Infrastructure investments. Network infrastructure investments in rural areas included roads, the telephone system, and internet on top of developing basic agricultural infrastructure such as irrigation and drainage. It connected farmers to markets and enabled manufacturing and service industries to develop in rural areas. High penetration of internet and mobile networks in rural areas accelerated the application of information and communications technology. E-commerce platforms such as Taobao have been essential in connecting farmers to end-consumers and oriented agriculture to be more demand-driven.

E-commerce has played a significant role in maintaining food supply chains during the COVID-19 pandemic. Beyond providing a platform for transactions, e-commerce platforms invested in logistics and marketing infrastructure and provided training for farmers to adopt new technologies. Growing engagement of tech companies in rural development is providing a new model of development led by the private sector. 

Strong social protection. Rural health insurance and pensions have improved since the early 2000s to help bridge the gap with the urban social protection system. A rural minimum basic living guarantee (Dibao) provides an unconditional cash transfer to the poor (6.2% of the rural population as of April 2019). An expanded social protection system has improved the quality of life in rural areas, and assisted aged farmers to retire and transfer their farm assets to more efficient operators. 

Despite remarkable progress in rural development, the People’s Republic of China still faces challenges. The per capita income of urban households remains more than 2.5 times that of rural households. The rural population continues to decline and is set to age rapidly. The expansion of agricultural production has been driven by intensive use of chemicals. Economic growth in rural areas can no longer be achieved at the expense of sustainable use of natural resources and requires more resilience to climate change.

Going forward, enhancing environmental welfare is key for rural areas to be attractive places to live, visit, and launch entrepreneurial activities. To that end, more investment is needed in rural environmental infrastructure, such as waste management, landscape and eco-tourism facilities. Public and private sectors can work together to make better use of underutilized rural resources including organic waste and by-products to generate new economic activity and improve environmental management. With continuing reforms, the People’s Republic of China is positioned to play a leading role in establishing a model of sustainable rural development in Asia and the Pacific.

China, PRC, People's Republic of China, rice field, agricultural activites, agriculture, farmer, farmers, paddie, rice, woman, Women, poverty, economics, farming, developmentShingo KimuraCountries: China, People's Republic ofArticle

Original Source: blogs.adb.org